Standing Committee B

[Miss Anne Begg in the Chair]

Waste and Emissions Trading Bill [Lords]

Anne Begg: Good afternoon. The Committee will have noticed not only that I have changed sides but that I have also changed political party. I am a late substitution as Chairman, and I will be chairing only this afternoon's sitting.Clause 2 Non-target years

Clause 2 - Non-target years

John Hayes: I beg to move amendment No. 32, in
clause 2, page 2, line 8, leave out 'may' and insert 'must'.

Anne Begg: With this it will be convenient to discuss the following amendments:
 No. 33, in 
clause 2, page 2, line 15, leave out from 'only' to 'the' in line 16 and insert 'following consultation with'.
 No. 34, in 
clause 2, page 2, line 17, leave out from 'only' to third 'the' and insert 'following consultation with'.
 No. 35, in 
clause 2, page 2, line 20, at end add— 
 '(5) The power under subsection (1) is exercisable following consultation with the relevant local authorities.'.

John Hayes: May I say how delighted I am, as all right hon. and hon. Members must be, to welcome you, Miss Begg, to the Chair of this exciting Committee? I look forward to further exciting debates this afternoon and thereafter.
 The amendment needs to be seen in the context of this morning's first debate, for which you, Miss Begg, were not present. The Committee discussed whether to change the word ''must'' to ''may''. We now want to change the word ''may'' to ''must''. That is principally on the ground of consistency—[Laughter.] I see that the Committee has spotted the logic in my argument. 
 The Minister knows that we would not want to leave him with a Bill that was imperfect. At the moment, it suggests that the Minister ''may'' specify the maximum amount of waste by weight of biodegradable municipal waste allowed in non-target years. It has already been acknowledged that, because of the obligatory requirements of the EU directive, ''must'' would be a more appropriate word to use at the beginning of the Bill. It is a matter of legitimate debate as to whether we should use the word ''must'' in the non-target years. 
 The difficulty with using the word ''may'' is that it might wrongly provide flexibility; it could provide variability and make it more difficult for us to meet those targets. The Minister was honest enough to say that it would be difficult to meet those targets, given the proportion of waste currently sent to landfill. We 
 do not start from a happy position in respect of meeting those stiff targets. As the Minister said on Second Reading, it will be a huge challenge. 
 The strength of the amendment is that it would encourage the Minister to be rigorous in his requirements—if we are to meet those targets, we must press ahead with vigour. Later in our proceedings, we shall say that it needs to be done with sensitivity, and proper consultation, but that is the subject of later amendments. I do not argue for a prescriptive approach. It must be done with partnership and agreement, and with proper collaboration between the interested parties, but ''must'' seems an appropriate word when specifying the amounts of waste to be sent to landfill in non-target years.

Gregory Barker: I am greatly looking forward to the Minister speaking in depth about the formula in clause 3. I wonder whether replacing ''may'' with ''must'' would have the additional benefit of simplifying the following clauses, which would save us having to deal with the complications that could arise.

John Hayes: My hon. Friend is teasing me to display my intimate understanding of those matters in an even fuller form than I had intended. He is right that changing the word will have a material effect on the whole of clause 3; it might be that if we change the word to ''must'', the formula will become redundant. Committee members will have read it and worked it through—I did a few thumbnail sketches on it last night and found that if one presents the formula graphically it is a straight-line graph. I am sure that my hon. Friend will understand that. It will certainly be of less significance if the Minister accepts the amendment. Other hon. Members might like to comment on the matter in the course of their perorations.
 However, the essence of the amendment is that if we are to meet the target that the Minister has rightly identified—if we are to press ahead with the speed and vigour that we all desire, without giving the Minister overweening powers—''must'' is a more appropriate word. On that basis, I probe the Minister to discover how he sees his role in relation to meeting the targets in the non-target years and whether he feels that it will be helpful for the Bill to give him greater authority so to do. I shall be interested to hear his response. Perhaps, in the course of it, we can have a full mathematical analysis of the formula with some worked examples.

Jonathan Sayeed: I welcome you to the Chair for this sitting, Miss Begg.
 In order to determine whether one wishes to support these amendments, it is important to agree what they mean. It is particularly important to tease out whether the Minister believes that they mean what we think they mean. I shall say what I think they mean, so that the Minister can tell me whether he agrees. 
 I turn first to amendment No. 32. As the Bill stands, during target years, there is total rigidity owing to external commitments. However, during non-target 
 years there is flexibility and it is within the remit of the Secretary of State to specify the maximum amount of biodegradable municipal waste that can be sent to landfills. If the Secretary of State decides not to use his powers, the default rules specified in clause 3(2) allow the formula to be applied. If he does exert his powers, then he may override the formula. 
 As I understand the amendment, it would force the Secretary of State by statute to specify the maximum amount of BMW, which would—later in the Bill—render the formula redundant, as there would be no need to use the default rules. Effectively, there would be no need for clause 3. 
 The argument in favour is that the amendment simplifies the Bill. It removes the complexity of a—straight-line or otherwise—scientific formula, which might be too abstract and inflexible. However, there is also an argument against: it gives the Secretary of State added responsibility and enhanced powers and permits him a degree of flexibility to specify maximum amounts. Effectively, it forces him to use his powers to override the formula and to stipulate, according to the needs of the time, the whole time frame of the Bill's targets. 
 Amendments Nos. 33 and 34 specify that the Secretary of State's powers are exercisable following consultation with Scotland and Wales. As the Bill stands, the agreement of Scotland and Wales is required, which gives the devolved authorities the power of veto over the Secretary of State's requirements. 
 I would sum up the arguments in favour as follows. If the Secretary of State is required to consult rather than to seek agreement, that would centralise more power under the control of the Secretary of State and, by definition, the power of England, and would permit the Secretary of State to override the devolved authorities and remove their power of veto. That could be justified by the greater need of England to meet the targets, which are specified externally by the EU and which would require some rigidity. However, there are also arguments against. It would involve the further centralisation of power and a move away from local decision making, and Conservative Members are extremely wary of doing that. 
 Moving to amendment No. 35, my understanding is that, as the Bill stands, there is no obligation on the Secretary of State to consult local authorities. The amendment would force consultation, but would not give local authorities a power of veto over proposals. The arguments in favour are arguments that are often adduced in similar cases. It would involve local authorities in the decision-making process. 
 However, the argument against is that some local authorities might consider it to be a somewhat tokenistic gesture—seeking discussion but still retaining the Secretary of State's right to overrule. However, that could be justified by the need to meet external targets, which place responsibility on central Government. 
 I should be grateful if the Minister would say whether he agrees with my interpretation not only of what the clauses were supposed to mean before 
 amendment, but what they would mean after amendment.

Michael Meacher: I, too, am glad to see you in the Chair, Miss Begg, for what will be a warm, and even entertaining, afternoon if it is a repeat of this morning's performance.
 I am a little puzzled. Having ended the remarkable morning sitting by being taken to task for being so pedestrian and prosaic as to be committed to the beauty of targets, on the grounds put forward by the hon. Member for South Holland and The Deepings (Mr. Hayes) that I should have a more aesthetic view of life and the great unquantifiable goals of love, friendship and altruism, I am now confronted, in the early afternoon, with being asked to explain an algebraic formula. I am not sure whether to be lyrical or mathematical, but I shall try to respond to each count. 
 Amendment No. 32 would change the discretionary power that the Bill gives the Secretary of State to set targets in non-target years to an obligation. Opposition Members are right to say that the Bill could be simplified in the way that they suggest. However, the amendments would remove the need, in clause 2, for the Secretary of State to reach agreement with the other United Kingdom Administrations on the maximum amounts of biodegradable and municipal waste to be sent to landfill in non-target years and require only that she consult with those Administrations before making the decision. The proposal is that she should consult but they should not be able to exercise a veto. 
 The problem is that that proposal runs counter to the devolution agenda. I think—I am sure that I am right—that it would be unacceptable to the Administrations in Scotland, Wales and Northern Ireland simply to be consulted and told that they could not override a provision. They would not regard that as in keeping with the nature of a devolved relationship, in which there is negotiation between equals. They are not equals, but they are more equal than the amendment implies.

John Hayes: I want to clear up that point at the outset. The critical point here is that responsibility for meeting the targets, and any fine imposed, would lie with the UK Government. There is a real worry that, if we are to take the hit and own up to the responsibility for meeting targets, we must retain control over the means by which we meet them. That is the purpose of the amendment.

Michael Meacher: It is perfectly true that in the end it is the Government who are responsible to Brussels for meeting the targets. If we failed to do so and were infracted—if that is the word—we would be subject to a payment, although we would ensure that that financial and legal liability was passed on to the other Administrations. To use a more common phrase, we would not simply pick up the tab, but would expect them to pay in accordance with their responsibility, and that is well understood.

Jonathan Sayeed: The Minister says that we would not pick up the tab. However, England keeps picking up the tab for Scotland, Wales and Northern Ireland through one formula or another. The question is whether they get extra money or not for not doing something that we ask them to—although I might have used too many double negatives and should perhaps express that slightly differently. English taxpayers and ratepayers subsidise Scottish, Welsh and Northern Irish taxpayers and ratepayers. I trust that if, for example, Scotland did not undertake a duty that had been imposed and agreed on, more money would not go from English taxpayers to Scotland in order to subsidise that.

Michael Meacher: Although that is certainly the case, there is no suggestion of giving financial aid through a different formula from that which is available in England in order to ensure that those targets be met. I repeat that the Government have made available substantial extra sums to local authorities across the country. That suffices in Scotland, Wales and Northern Ireland. Those local authorities are expected to meet the targets with the financial dispensations that have been made.

Bill Wiggin: Will the Minister give way?

Michael Meacher: I am finding it difficult to keep to the thread of the argument, but of course I will give way.

Bill Wiggin: Let me help return the Minister to the thread of the argument. When we were talking about target years I asked him whether he felt that the Government's devolutionary spirit would be undermined by the Secretary of State's insisting on compliance during target years, and now it appears that the Secretary of State is happy to be more flexible during non-target years. Does that not undermine the authority of those regional Governments? I do not believe that that is something that the Minister intends to do.

Michael Meacher: No, it certainly is not something that I intend to do, nor is it something that the Government will do. Clause 3 contains the default position, which would prevent that from happening.
 The approach of the amendment runs counter to the established framework of devolution and would not be acceptable to the Administrations. Protection of the environment is generally a devolved matter, and it is right that the setting of targets in non-target years should be subject to agreement between the parties. In other words, we are trying to provide as much flexibility as we can, while safeguarding the meeting of the targets in the target years. That is the key point. The negotiations are open and transparent—at least I think that that is right, and there is no question of trying to conceal them. If no agreement is reached in non-target years, as is possible, clause 3 provides the default position, which would provide a gradual reduction between target years. 
 Amendment No. 35 would require the Secretary of State to consult relevant local authorities before setting targets through regulations in non-target years under the clause. It is difficult to see quite what the intention is. The Secretary of State and the 
 devolved Administrations will agree the setting of targets in non-target years between them. Local authorities have no locus in that operation. Rather, they have locus in allocating allowances to waste disposal authorities under clause 4, for which it is intended that they be consulted on the basis used for the allocation, as part of the wider consultation on regulations to set up the landfill allowances scheme. Once allowances are made, clause 4 requires the allocating authority to publish a statement setting out the allowances allocated to the authority and the basis of the allocation. 
 In relation to the position in Scotland and Wales, to proceed by agreement where possible and not by diktat from London is clearly the only approach in a devolution age. The consultation that is referred to in amendment No. 35 is unnecessary for the reasons that I have given, and I hope that, on those grounds, the amendment will not be pressed. 
 There was some interesting discussion about the exegesis of the mathematical formula. I would not attempt to do any such thing, but I would refer any hon. Member who is interested in exploring it—it is very detailed, although a careful reading makes it clear—to fact sheet No. 5. It is available and I am happy to provide it to any member of the Committee. It sets out in detail, with plenty of graphs, exactly how it operates. The simple principle behind it is that where agreement is not reached, there must be a formula that will ensure that it is reached. That is provided here, and examples are given.

David Drew: Who interprets the formula? Is it done within the Department for Environment, Food and Rural Affairs or elsewhere?

Michael Meacher: I hope that the formula is self-disclosing if one takes account of the definition of the variables L, N, B and G. They depend on whether the year in question falls directly after a target year or whether there is one or more intervening year between the last target year and the one in question. If one reads the rules and the footnotes that underpin the formula, that should be clear. In the last analysis, if there were a dispute about how it works, it would be for the Department or the Secretary of Secretary of State to determine it.

Norman Baker: Since we are talking about the formula—

Anne Begg: Order. Before the hon. Gentleman starts, the formula comes up in the next clause. Unless it is relevant to clause 2, hon. Members might like to wait until we debate that clause. Mr. Baker, do you still want to intervene?

Norman Baker: No; I am suitably chastened.

Michael Meacher: I am, if not suitably chastened, suitably finished. I have answered the points that have been made. I hope that I have explained that our formula is designed to achieve maximum flexibility while ensuring that the targets are met. That is better than simply consulting but saying that there is no veto—in other words, claiming to consult, having already decided. That is not acceptable; the formula is better. I hope that I have explained it and that the
 amendment was a probing one, which the hon. Member for South Holland and The Deepings will withdraw.

John Hayes: There will be more than enough time to discuss the consultation issues associated with the amendments in the course of our proceedings. At this point, I would signal that it is vital that the whole process be founded in the spirit of partnership between local and national Government. Local government will end up having to do the job, and the variety in local situations, both in terms of the volume and nature of waste and of the structure of local government necessitates proper consultation. Two-tier authorities and unitary authorities are involved, as well as urban and rural authorities, all with their own waste culture. However, I accept that that consultation would be best discussed later. As the Minister suggests, the targets are fixed and the consultation might—as my hon. Friend the Member for Mid-Bedfordshire (Mr. Sayeed) said—be perceived as purely paying lip service if the local authorities were to be consulted only to be told that the matter had been agreed anyway, as the Minister put it.
 In terms of the Scottish experience, it is important to acknowledge that the Minister has made it clear that we shall not find ourselves in that situation. My hon. Friend the Member for Mid-Bedfordshire rightly feared that the Minister would be in a position in which the UK Government would accept responsibility and, indeed, financial liability, but that would not be passed on to the devolved assemblies. However, the Minister made it clear that that was not the case and that the assemblies would be expected to take, in an appropriate fashion, their share of the responsibility and any financial penalties that might ensue. 
 On the basis that the Minister has given us assurances on both those points, and given that we shall debate the formula in fine detail in the discussion that we are about to enjoy, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill.

Michael Meacher: I am happy to respond to any questions, but we have explored the fundamental principle and I have nothing further to add. Given that the Committee is anxious to make progress and save time for the more substantive issues, I shall conclude my remarks.
 Question put and agreed to. 
 Clause 2 ordered to stand part of the Bill.

Clause 3 - Non-target years: default rules

Question proposed, That the clause stand part of the Bill.

Michael Meacher: There may well be a wish to discuss further questions about the formula. I hope that that
 can be done by reference to fact sheet No. 5. The clause provides default rules for setting the maximum amount of biodegradable municipal waste by weight that may be sent to landfill by the constituent countries of the UK in scheme years that are not target years. The default rules would apply if the Secretary of State did not set a maximum for that year under clause 2 because, for example, she could not secure agreement on the target with the appropriate authority. The formula secures the reductions needed to meet the target in the next directive target year in equal annual steps from the last target year, or the last scheme year when agreement was reached—whichever is the later. That ensures that the reductions required by target years are achievable through progressive reductions in targets for non-target years in the absence of agreement between the parties. Our preference is for such agreement, but if that cannot be achieved, the default formula kicks in.

Gregory Barker: I am sorry to interrupt the Minister and I may well be ill prepared, but no one seems to have access to fact sheet No. 5; I do not believe that it is supplied on the Table. It would greatly help the debate if we had sight of that fact sheet.

Michael Meacher: I am sure that that is right, because to attempt to explain the measure to this avid listening group without access to the detailed figures is a virtually impossible task.

Anne Begg: May I suggest that we suspend the Committee, because I think that someone has gone to get fact sheet No. 5? I hope that that will take only a few minutes.

Bill Wiggin: On a point of order, Miss Begg. Could something as important as fact sheet No. 5 be included in the explanatory notes to the Bill, or is there a formula for explanatory notes that would preclude something as germane as that fact sheet from being included?

Anne Begg: The Minister in charge and his Department produce the explanatory notes.

Bill Wiggin: Shall I draw that to the Minister's attention?

Michael Meacher: Do you want me to respond?

Anne Begg: I have suspended the Committee, so you can do anything that you like.
 Sitting suspended. 
 On resuming—

Anne Begg: Order. The doorkeeper is distributing fact sheet No. 5, so every Committee member will have a copy. I believe that the technology in the House slowed things down.

Michael Meacher: I have never known such demand for a DEFRA fact sheet; I hope that that is a harbinger of things to come. It is complex and it might take hon. Members a while to get the hang of it. I apologise for the fact that it was not made available with the explanatory notes. We shall ensure that the other six of
 the seven fact sheets are made available at the start of the next sitting.

Norman Baker: Will the Minister give way?

Michael Meacher: Obviously, I am not going to get very far.

Norman Baker: I have had a moment or two to look at the formula afresh, without reading fact sheet No. 5. The explanation of the letters is given in subsection (5), G and B being relevant years. I fail to understand why it is G + 1 and B + 1, rather than simply G and B. What is the significance of the one that is added? Can the Minister comment on the implications of removing the one?

Michael Meacher: I am sure that by the time I finish my other remarks an answer will be forthcoming—at least, I hope so. Having made the fact sheet available, I do not think that we should become too involved in the algebra. It is the principle behind it that is the issue. The formula secures the reductions needed to meet the target in the next directive target year in equal annual steps from the last target year—which is why there are two graphs with a straight line at different levels of incline—or the last scheme year when agreement was reached, whichever is the later. That ensures that, in the absence of an agreement between the parties, which we would much prefer, the reductions required by target years are achievable through progressive reductions in targets for non-target years.
 Subsection (6) deems the year ending 16 July 2004—that is important because it is the first opportunity when it kicks in—a target year for the purposes of the default rule. That is necessary because the default might be—I would say, will be—needed before the first actual target year, which is 2010. The amount deemed to have been set under clause 1 for the nominal target year of 2004 will be set by regulations, but will be based on the amount sent to landfill in the year ending 31 March 2001. Again, that is necessary to ensure that the formula can be worked through before the first landfill directive target year. That base amount may only be set after consultation with the constituent countries of the UK. That is basically how the formula works. Unless I can offer any further advice—

Alan Whitehead: Perhaps I can help my right hon. Friend. As far as I can see, where there were no years between the target years, and so G and B are nought, part of the formula would be multiplied or divided by nought, which would make nonsense of the formula. The + 1 is therefore needed.

Michael Meacher: I have always known that it was a stroke of genius to have my hon. Friend on the Committee. That is a brilliant explanation. It sounds plausible to me, and I am prepared to stand by it.

John Hayes: I am grateful to the Minister for making the information available to the Committee. I said to him privately, and it is worth placing this on the record, that I had the wit to work out the graph before I had seen fact sheet No. 5, but I did not have the wit to find fact sheet No. 5. I do not know what that says about me. I understand that it was available in the
 Library, and I am grateful for the Minister's generosity in ensuring that we all have it and for making the commitment that we will have all the other necessary fact sheets.
 If we pursue the logic of the debate a few moments ago, by which, in effect, we gave priority to ''may'' rather than ''must'' at the beginning of the chapter, we find that it is absolutely essential to have a default formula. The formula presented to us does exactly as the Minister says and provides a guarantee that we will have a reasonable chance of meeting the targets on the basis of a progression. To that extent, it is appropriate. I have little more to add.

Bill Wiggin: Although I am deeply impressed that my hon. Friend managed to discern that this was a straight-line graph, I am a little worried that as the Committee needed fact sheet No. 5, anyone taking part in the negotiations will also need it. Perhaps it should be part of the explanatory notes, or there should be a more permanent accompaniment than something that is squirreled away in the Library.

John Hayes: That is a fair point. I do not wish to be facetious, but it is important that the default position is comprehensible, especially to those who have a direct interest in these matters. Frankly, given the confusion that it has caused among the luminaries of the Committee, I hate to think what it might do more widely. My hon. Friend is right; comprehensibility is an important factor, given that the Bill requires a spirit of partnership with several agencies, as I said earlier. The Minister may want to reflect on the need to explain it to people in more detail so that it is more widely accessible. On that note, I conclude my remarks, and I look forward to the Minister perhaps reflecting and commenting on them in the course of his own deliberations.

Michael Meacher: I shall be extremely quick. I do not believe that every negotiator at local authority level needs to grasp the full algebraic beauty of fact sheet No. 5. The issue is simple: we try to reach agreement with the bodies that are responsible for carrying out the aims of the Bill, but in case we cannot do so, there must be an agreed formula by which we can achieve those target productions within the time scale. This formula delivers them. People are free to go through the mathematical detail if they want to, but it is unnecessary to force that on them, and it would not be welcome. In the end, the proposition is simple, even if it looks complicated.

Norman Baker: I shall abandon the mathematical formula, but ask whether the concept of the default rules has been agreed with the Scottish Parliament and the National Assembly for Wales.

Michael Meacher: It has.
 Question put and agreed to. 
 Clause 3 ordered to stand part of the Bill.

Clause 4 - Allocation of landfill allowances

Bill Wiggin: I beg to move amendment No. 36, in
clause 4, page 3, line 28, after 'authority', insert 
 'taking into account that there can be no separation of responsibilities between district, or county council,'.
 The amendment identifies the different types of authority. I believe that there are at least four types: the allocating authorities and the district, county and unitary authorities. Currently, we are dealing with the allocating authority, which would be an Assembly, such as the National Assembly for Wales, the Scottish Parliament or the Northern Ireland Assembly, when there is one. 
 The important point is that all the authorities should work together to achieve the landfill targets. I am keen to close the loophole that may allow authorities to play off against one another. Let us say, for example, that a district authority under a county council is responsible for waste collection, while the county council is responsible for waste disposal. I am keen to ensure that if there is any failure, the failing part of that two-tier team is held responsible, but equally that the responsibility is managed internally, rather than by the Government. That is what the amendment is designed to achieve. 
 That is an important consideration, because there are many different ways of dealing with waste collection. We can consider examples from abroad. Apparently, almost all EU members are introducing a type of landfill tax except for Greece, Portugal and Germany, so even within the EU there are exceptions to the rule. I am keen that we do not allow exceptions to creep in with our Bill. I hope that the amendment is constructive and helpful and that the Minister agrees with me.

Norman Baker: I welcome the opportunity to discuss the relationship between district and county councils or, more accurately, waste collection and waste disposal authorities, because it is terribly important and needs to be discussed in some detail. I must refer to clause 31, because it is inextricably linked with the amendment. In fact, that clause is in a rather odd place in the Bill, but for the purposes of discussion it does not matter where it falls.
 My concern is that previous legislation constructed arrangements whereby the responsibility for waste in two-tier local authority areas is divided between county and district councils. Of course, the same does not apply to unitary authorities. Under those arrangements, a patchwork solution has been constructed whereby some county councils perform very well, pulling district councils along behind them, and other, star district councils are let down by the county councils. Each waste collection authority or district council will almost certainly construct a different solution for waste on its own patch. 
 Like many hon. Members, I have more than one district council in my constituency. Lewes and Wealden both perform very well, but each has a completely different approach to waste collection. One has a traditional dustbin system, and one has a wheelie bin system. One authority has a doorstep collection in different parts; another has a ''bring it along'' system. There is a mixture with regard to how authorities are 
 delivering, but they all want to achieve the recycling targets. 
 I am concerned that if we are not careful, the Bill will result in an attempt by county councils to force a uniform system on authorities, particularly district councils, that may not be appropriate to their needs. I do not underestimate the difficulties of finding a solution, and I do not have one, but there are two options. One could abolish waste collection authorities and make one authority responsible for collection and disposal. Many people consider that an appropriate solution. It seemed to work quite well in the unitary authorities, and it is easier than when the responsibility is split. 
 Alternatively one could have a system in which one authority within the disposal and collection regime is unable either to frustrate the other authority or to behave in such a way that it misses targets and leaves a different authority to pick up the bill. In that system, one could not have a situation that allowed a disposal authority to decide that it wanted to have a uniform approach across its county, telling individual collection authorities that they must change their method of dealing with waste, irrespective of the cost and the consequences for their particular scheme, which they might have carefully nourished and developed specifically for their needs. 
 Clause 31, which we will deal with in detail later, seems to give disposal authorities excessive powers to control the performance of collection authorities, which will then be at their mercy, irrespective of how well they are performing now. They will simply be told to change because they do not conform with what the waste disposal authority wants. In a sense I was expecting to have some of this discussion on that clause, but the amendment refers to the separation of responsibilities. 
 How does the Minister see the future relationship between disposal authorities and collection authorities? How would a solution be found if those authorities were in dispute? How will he ensure that one type of authority cannot thwart another type of authority or behave unfairly towards it? What does he envisage the role of collection authorities being in the allocation of landfill allowances? This is a big issue, and we need to get it right or it could derail the Bill.

David Drew: I am delighted to serve under your chairmanship, Miss Begg. Following on from the hon. Member for Lewes (Norman Baker), I should like to ask the Minister about the planning process, principally through the waste strategy plans that each authority has to put in place. It is a matter for which he does not have responsibility but it is crucial to the way in which the Bill will operate.
 I can speak only through my own experience in Gloucestershire, where I gave evidence for the waste plan. The idea was that the six district authorities would work with the county authority to produce an all-singing, all-dancing, cohesive plan, which would have major implications for recycling and for waste disposal in general. 
 I would have spoken about this on Second Reading if there had been more time, although I alluded to it. Is 
 it possible to move to a system in which, as the hon. Member for Lewes said, one authority cannot dump, metaphorically and literally, on another? If not, the whole strategy will begin to unravel. I am particularly interested in how we can give every encouragement to two-tier authorities to work together so that targets are not just set, but delivered. We all know that waste does not necessarily remain in the area where it was collected; it moves on. Perhaps the Minister can tell us how we can get that greater degree of cohesion and how, without having to use the stick, we can ensure that instead of just speaking warmly about their waste plans, authorities get their act together and adhere to them.

John Hayes: I want to amplify the arguments of the hon. Members for Lewes and for Stroud (Mr. Drew) and to reaffirm those made by my hon. Friend the Member for Leominster (Mr. Wiggin) when he introduced the amendments.
 The key point is recognition of the fact that there is great variability in waste culture both between and within local authorities. A county council in a two-tier situation may be good at its job, but some or all of its district councils may not be so good at their jobs. That is a fact of life: it is not a party issue, but is about all parties and none. However, in those circumstances, and where the relationships are not right and proper, it would be difficult to meet targets for which a high level of co-operation is required. 
 The point made by the hon. Member for Stroud should be emphasised. He said that it is not just that such authorities will not be efficient, but that they may not yet have taken their responsibilities seriously. They may not yet have woken up to the necessity of putting together a coherent plan. I need to be convinced that sufficient discussion is taking place between the relevant authorities in all parts of the country. That will certainly happen in some places where strong relationships already exist. Those areas will have got ahead of the game and will already be having the right sort of discussions in anticipation of the targets and the Bill. However, in many parts of the country that will not be the case. 
 That issue must be viewed against the background of the variable needs and qualities of different parts of the country. Some areas have a proliferation of a particular type of waste—commercial and industrial waste, for example—whereas other areas have dense populations. My area is sparsely populated and that creates a different kind of problem in terms of waste collection, the distribution of resources and the provision of a public service to a sparse community. There is enormous variation in the means and needs of different areas and that will have an impact on the ability of different areas to meet the targets. To enable them to do so, we must include in the Bill an impetus for the relevant authorities to work together. My hon. Friend the Member for Leominster sought to do that in proposing the amendments. 
 I will be interested to hear from the Minister his assessment of how far we have gone in encouraging local authorities to operate in that way and what his 
 model would be for encouraging them to do so in areas where they are not.

Sue Doughty: I welcome you to the Chair, Miss Begg. I am concerned about the idea of consultation. In a perfect world, a district authority or a borough council should be consulting with its county council and, of course, we would all want them to agree. One of the interesting things that the Audit Commission found was that the
''split between collection and disposal authorities appears to be unique in Europe.''
 I believe that to be a problem and that is why I support what my hon. Friend the Member for Lewes said. The Audit Commission found that the split led to inefficiencies, and stated 
''two-tier authorities, where collection and disposal are split, will find it harder to meet their targets.''
 Throughout the country, there are many examples of the collection authorities being, for one reason or another, unhappy with the waste strategy of the disposal authority. The collection authorities may have decided that they want to avoid incineration, particularly if it was going to come their way, and they might adopt a zero-waste strategy or some other waste management strategy that they felt was more sustainable than the one that the county council had proposed. Throughout the country there are authorities where the county and the district are at odds with one another about the most sustainable way of dealing with waste while also trying to achieve targets, and that is a problem. 
 I do not like that split, but I realise that the Bill is not about that. I would be interested to hear the Minister's comments on the matter, although I appreciate that there is nothing in the Bill to change it. I fear that the proposal in the amendment is not deliverable, because the disposal authority and the collection authority will not always agree, especially where the collection authority has from time to time made its own arrangements because it has probably been able to do it better.

Jonathan Sayeed: It is understandable and proper that the allocating authority should look to the waste disposal authority to organise how waste is better processed, but that the waste disposal authority should require the waste collection authority, if it is not the same authority, to produce that waste in a form that allows it to carry out the task that it has been set by the waste allocating authority. Therefore, the relationship between the disposing authority and the collecting authority is fundamental to the working of the Bill and to our ability to achieve the targets that we are statutorily obligated to achieve. As I said on Second Reading, not enough thought has been given to that relationship, which falls into two parts. The first is the power to direct, if necessary, and the second is the power to fund. Then I suppose there is a third part: who is fined when it does not happen?

Gregory Barker: I totally agree with my hon. Friend. His points are consistent with the evidence given to the Environmental Audit Committee by the Local Authority Recycling Advisory Committee, which said:
''There is not a sound business plan for implementing sustainable waste management in this country, certainly not at a national level and certainly not at a local level because we do not get consistent messages. We are not hearing consistent messages from across various governments departments.''

Jonathan Sayeed: That is extremely interesting. I admit that I had not read that piece of evidence, but it goes to the heart of the problem.
 There is no size that will fit all. That is clear. What will happen in an urban environment will be different from what happens in a rural environment; what happens in an area of sparse population will differ from what happens in a semi-rural area, where the population density is greater. There is also the history of the way in which people have learned and practised any form of separating their domestic waste. 
 We can all accept that one size will not fit all. However, someone has to be in charge, and the person in charge will be the disposal authority, which will require different authorities to produce waste in a certain fashion. Provided that everyone is producing the waste in the fashion that is required, even if they are not doing things in the same way, they should be permitted flexibility in the way in which they perform that function. 
 What is not set out and what local authorities I speak to are unclear about is what happens if they cannot get the collection authority's agreement to produce the waste in the fashion that they require—the two authorities may be politically at odds with one another—in which case the disposal authority can have a fine levied on it. As I understand it, there is no provision to pass that fine on to an errant authority.

John Hayes: My hon. Friend makes a very strong case, which builds on the question of variety. He understands that a county council may have in its bounds seven or eight districts. They may have different politics and will certainly have different waste profiles. Some may be urban, some may be suburban and some may be rural. The relationship between the two sets of authorities is therefore complex politically and in terms of the waste profiles and cultures of the collection authorities within the disposal authority, which may be a large county council.

Jonathan Sayeed: My hon. Friend absolutely makes his point. My constituency includes Bedford borough council, the edge of Luton, which is a unitary authority, authorities in south-west Bedfordshire and a bit of north-east Bedfordshire, and Mid-Bedfordshire district council. Each of them might do things differently, although, in fact, three do things similarly, while two do things very differently. However, they all have one disposal authority, even though they are of different political persuasions.
 We are all trying to achieve the same thing: the source separation, recycling and reuse of waste. Neither the Bill nor any regulations of which I am aware will ensure a harmonious relationship between the collection and disposal authority, nor will they ensure that collection is carried out in a way that assists the disposal authority with its job. Given that 
 that is the case, how will the fining of the disposal authority filter down to the collection authority if it is at fault?

Norman Baker: Will the hon. Gentleman also reflect on the fact that we could be facing further local government reorganisation? There is a move towards the creation of regions and it is not impossible that councils may be abolished in the near future. I do not think that I am taking things too far and such moves have certainly been suggested. Will he reflect on the problems that would arise between potentially much larger disposal authorities and an even greater number of collection authorities?

Jonathan Sayeed: That may be a bit further over the horizon than I wish to look. I will oppose the regions and the diminution of county councils' powers throughout my political life. That is one guarantee that I will give, because I am dead against regionalism—it is a load of rubbish.
 Anyway, to get back to a different form of rubbish—waste—the Minister must answer a fundamental question. How does he envisage the relationship between the collecting and disposal authorities in terms of funding and fining?

Paddy Tipping: This is an important discussion, which runs through not only the Bill but wider social and economic policy. In effect, we are talking about the distance between those who believe in a centralist approach and those who believe in, dare I say it, new localism.
 One discussion today has been about the words ''diverse'', ''different'' and ''complex'' and we all need to perceive that local authorities and their areas are fundamentally different. There will be real differences between collection in urban and rural areas. In high-rise areas, it is tough to have a collection system and, beyond that, a recycling system, while rural areas have their own problems. The key to the debate is how we handle those difficulties. 
 The essence of the argument is the relationship between the collection authority, which is typically the district council, and the disposal authority, which is the county council. As I said, that discussion runs through the Bill. As the hon. Member for Lewes said, there will be a lively discussion about the matter when we come to clause 31. There will also be a discussion when we come to clause 17, because the Bill was amended in the other place to include a new subsection (5), which means that the waste disposal authority—the county council—can tell the waste collection authority what to do. That is not satisfactory. I am not entirely sure that the amendment that we are discussing is satisfactory. 
 There will be discussions later when we consider amendments Nos. 20 and 21, which the Minister intends to introduce as a substitute for the Lords amendment relating to clause 17(5). As I understand amendments Nos. 20 and 21, they specify that there should be discussions between the collection authority and the disposal authority and that use should be made of best practice as defined by guidance from the 
 Secretary of State. There is no one easy solution. The solution for the Committee in the course of its work is to find a form of words to define the relationship that acknowledges that there are tensions between the collection and disposal authorities. We should build on the framework of this skeleton Bill and lay down a set of parameters and guidelines that allows those authorities to work together. That is what we are trying to edge towards now.

Jonathan Sayeed: Does the hon. Gentleman agree with my reading of the Bill? It is that the allocating authority allocates allowances to the waste disposal authority, which has the power to direct the waste collection authority about how to separate waste and where to deliver it. Does he think that that is a healthy form of direction? Does he believe that it is likely that the disposal authority will really understand each and every one of the collection authorities? Is this not an occasion when one size will not fit all?

Paddy Tipping: I fundamentally agree with the last point, which must be right. On the hon. Gentleman's earlier remarks, the Bill has been altered since its introduction in the other place. Clause 17(5) gives the disposal authority the right of direction. Clearly, that does not appear to be right. If I understand the Government's intentions, having considered the amendments that we will be discussing at a later date, clause 17(5) is to be deleted. Amendments Nos. 20 and 21 will redefine the relationship. They state that the disposal authority must have discussions with the collection authorities and must take into account best practice and guidance from the Secretary of State. That is a positive and healthy way forward. I am not entirely convinced—I may be convinced after some more discussion—that that will resolve and settle the problem, but it is a better way forward than the present provision.

Alan Whitehead: If people are not already putting their heads in their hands, may I add a further element of potential complication. That is not the relationship between waste disposal authorities and waste collection authorities, but that between waste disposal authorities and waste disposal authorities. The allocating authority is supposed to provide each waste disposal authority with an amount that it can put into landfill. In fact, a number of waste disposal authorities have formed consortiums—there are four in London. There is a consortium of all the Manchester authorities except one, and there are consortiums of the Cleveland and Merseyside authorities. In Hampshire, the former county council that covered a unitary authority area where the unitary authority has become unitary relatively recently has formed a consortium for waste disposal purposes with the unitary authority. Such consortiums have, in many cases, entered into long-term contracts with each other. That poses the question of what the allocations mean to each waste disposal authority. Those authorities will, between them, jointly endeavour to do particular things with their waste. Just as there are distinctions between waste collection authorities and waste disposal authorities in terms of the preferred routes, so there are between waste
 disposal authorities where they have formed a consortium.
 In some instances, waste disposal authorities specify that they do not wish their waste to be dealt with in certain ways. As part of a consortium, they opt out, for example, of incineration. Where a consortium has part shares in an incinerator but one or two members of the consortium do not choose to send their waste to that incinerator, two things might result. First, it is possible that elements of the consortium will not be able to reach their targets, whereas others will. In that case, does the consortium, as a basket, count in terms of the target? Alternatively, it might be necessary to trade allowances to balance the books between waste disposal authorities. That would be insider trading. I am not sure that it would be a particularly good idea for insider trading to be an integral part of the waste allowances trading mechanism, but there are no doubt ways around the problem.

Michael Meacher: More hon. Members have participated in this debate than in any other. That reflects the fact that this is an integral part of the operation of the system. I do not demur from anything that has been said. It is a difficult system to operate and it depends on willingness to co-operate. We want there to be flexibility between authorities and positive responses to meeting targets. However, one cannot regulate authorities—one cannot force relationships. One can only have a fall-back provision in case the relationship breaks down. As many hon. Members have said, the relationships between some districts and counties are not good—not necessarily where they are represented by different political parties.
 Although there are serious problems, it is right to try to nurture the relationship and to structure it in the way that will get the best result. The amendment would require the allocating authorities—the Secretary of State in the case of England and the national Assemblies in the devolved Administrations—when they make their allocations to take into account 
''that there can be no separation of responsibilities between district, or county council,''.
 That is odd because, as hon. Members know, there is a division in two-tier areas where the waste disposal authority is at county level and the waste collection authority is at district level. The Bill seeks to ensure that the UK meets its targets under the landfill directive by requiring the waste disposal authority to reduce the amount of biodegradable municipal waste sent to landfill. I think that the hon. Member for Mid-Bedfordshire said that that was the right focus in terms of securing the appropriate agent. 
 The obligations are imposed on the disposal authorities, whether unitary or county, because they are obviously responsible for the final disposal of waste and so for sending waste to landfill. The important thing is that we must have a clear ownership of responsibility if the directive targets are to be met. However, I agree that the waste collection authorities will have to work in strong partnership with the waste disposals authorities if the reduction of waste to landfill is to be achieved in a sustainable way. I think that that there is no division in the Committee on that. I hope that we are all agreed. 
 The only question is what is the best way to achieve the target. One does not do it by abolishing the collecting authority and having only a single authority. That is not viable. One therefore has to structure that relationship as positively as possible, while putting the focus on the key body, which must be the disposal authority. 
 Many areas—even a majority—have good partnership arrangements between the different authorities and they manage waste together. That is not always the case, however, and I know of some notorious examples. Some waste collection authorities are by no means working constructively with their waste disposal authorities. We tried to tackle the problem by giving the disposal authorities the power to direct the waste collection authorities on the form in which waste should be delivered. We shall have the opportunity to debate the power of direction when we come to clause 31. I take it, Miss Begg, that it is not your wish that we should have a detailed discussion about it now. However, when we reach the relevant clauses, that can be explored further. 
 We will also be discussing the provision included in the Bill in another place for statutory joint municipal waste strategies. I have already referred to that. The Government are still considering their view on that, but it is certainly relevant to the issue that we have been discussing this afternoon. 
 The amendment would not be helpful. I hope that it is a probing amendment. It would not ensure joint working. It does not reflect the reality on the ground, because there is a real division of responsibility that we cannot ignore in that way. 
 We chose a power of direction rather than other methods of enforcement, such as penalties being passed down, for a number of reasons. First, we want local authorities to work together. We want to accentuate the positive and the threat of financial penalties between authorities is not a good way to do that. We certainly do not expect the power of direction to be used in the first instance. It is the last resort, to be used only if patient negotiation between authorities cannot be made to work. It is a power of enforcement. It can be legally enforceable. For that reason, it should be used only when relations have completely broken down. We certainly do not regard it as the norm, but as a fall-back position.

Gregory Barker: It is an unequal relationship, however, if one local authority has the power over another. Would the Minister consider a mechanism whereby a collection authority facing a direction has a right of appeal?

Michael Meacher: We shall discuss that when we come to clause 31, but I agree that in giving a legal power of enforcement—a legally enforceable mechanism—there must be a right of appeal against undue restraint or unfair practice. However, I accept that we cannot put an untrammelled power of direction in the hands of one authority, to be used against another.
 The second reason that we did not want to use penalties, preferring a power of direction, is that it 
 would become a fight about who had responsibility and not about joint working. The emphasis is wrong. Thirdly, penalties would drain money out of the system and that is the last thing that we want to do. If anything, we need more money in the system and financial penalties would have a perverse and unintended effect. That is why we have chosen this fall-back method of fostering good relations between collection and disposal authorities. I hope, with that explanation, that the amendment will be withdrawn.

Jonathan Sayeed: I shall be fairly brief. I agree with the Minister that we do not want to drain the system of resources, and we certainly do not want to pay them to lawyers. The idea of paying lawyers from one authority to fight the lawyers of another authority does not seem to be any good for anyone—except lawyers. The Minister said that, if I may paraphrase him, he wants to nurture good relationships between authorities, and that is a very worthy aim. However, authorities will disagree and their disagreements will be fairly fundamental, and legislation that does not allow for that is faulty.
 The Minister suggested that the best method was the power of direction, but I give him an example: close to an election a waste disposal authority, pressurised by European legislation that forbids it to send its waste to landfill, determines that it will dispose of its waste by building a big incinerator in the area of the waste collection authority. Does anyone believe that a waste collection authority will abide by the directions of a waste disposal authority that require it to produce its waste to go into an incinerator in its own area? I imagine that that is very unlikely. Legislation that cannot allow for conflict is faulty. The Minister talks about having an appeals process that allows one to appeal against undue restraint or unfair practice, but in the example that I have just given, a collection authority would profoundly contest a direction that was so much against its interests. Unless legislation can deal with such possibilities it runs the risk of going badly wrong in future.

Michael Meacher: I shall try to respond to that. I repeat that the aim must be to try to establish a good working relationship. The hon. Gentleman has posited a situation in which the collection authorities abide by the direction—this is when relations have broken down, I presume—only to find that what they have duly collected in accordance with the direction imposed on them is then sent to an incinerator in their own area. If an incinerator already existed on a site, presumably the waste disposal authority would have been engaging in the practice for some time. It would not be a new situation created by the Bill. The hon. Member for Colchester (Bob Russell), who, if I remember correctly, had question 19 on the Order Paper today, was going to raise that issue with me. I can assure him that I was well prepared.
 I do not think that that will be generated by the Bill. Even where that happens and there are strong objections, there are ways in which authorities could be required to look at the matter again. I return to the example, with which I am now familiar, of Essex. There was a proposal there to build new incinerators 
 but there was such public controversy that consultants were appointed to examine all the implications. I understand that in the light of that, the proposal is now being reconsidered and the role of incineration is now more open to public discussion and debate. 
 I do not think that one can structure everything entirely by statute. I am one of those who think that that can do little more than provide the framework. In the end, it is a matter of using all the other levers that exist in a democratic society for dealing with objections. I still think that it is right to have this balanced relationship. I am sure that it will work co-operatively in the great majority of cases. If not, there should be a power of direction, but that has to be exercised reasonably. We will discuss that further under clause 31. On that basis, I hope that the hon. Member for Leominster will find it acceptable to withdraw the amendment and keep to the proposal set out by the Government.

Bill Wiggin: I thank all members of the Committee who have spoken, because the purpose of the amendment was to draw out from the Government ideas on the difficult situation that we are approaching. To my delight, some extremely wise, helpful and sensible points have been made—perhaps rather better than I could have made them.
 I hope that the Minister has taken on board the points made by not only Labour Members but Opposition Members. I hope that lessons from people's comments are learned in time. If we continue at this rocket-like pace, the Minister will have plenty of time to consider all the points made. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 4 ordered to stand part of the Bill.

John Hayes: On a point of order, Miss Begg. I waited for a convenient time to raise this point of order rather than interrupt the flow of the Committee's work, but when we had our interesting discussion about fact sheet No. 5, it occurred to me to question whether we had had sight of the regulatory impact assessment. I noticed that that was not detailed in the explanatory notes, which I know is the custom in such matters. I have also discovered that the assessment is not on the departmental website, which is also the normal practice. I expect that that will concern Members across the Committee. I wonder whether I might query that through you, Miss Begg. It might simply be an oversight, but a word of explanation would be helpful.

Anne Begg: I understand that the regulatory impact assessment has now been circulated to Members. Perhaps the Minister can answer the other specific points.

Michael Meacher: Yes, I am pleased to respond. I hope that—

John Hayes: I now have the regulatory impact assessment in my hand.

Michael Meacher: Good. That has happened only this moment. I apologise that it was not made available earlier. I do not know whether it is on the departmental website. If it is not, I will ensure that it
 is placed there. Again, I say in all sincerity that I am very keen for all hon. Members on the Committee to have access to the same data that I have to explain the Bill. I apologise that that document was not made available earlier.

Clause 5 - Alteration of allocations under section 4

John Hayes: I beg to move amendment No. 37, in
clause 5, page 4, line 4, after 'may', insert 
 'with the agreement of the relevant waste disposal authorities'.
 I have been trying to acquaint myself with the regulatory impact assessment before speaking to the amendment. As that is a rather long document, you will understand my slight hesitation, Miss Begg, before rising to my feet. 
 In a sense, the amendment follows from previous discussions. The point has been well made in the Committee that much of the Government's work on the Bill will be dependent upon a collaborative and co-operative partnership arrangement with the relevant authorities. We talked at length in the helpful discussion on the previous amendment, tabled by my hon. Friend the Member for Leominster, about the relationship between collection and disposal authorities. We also touched on the relationship between disposal authorities and Government, which the amendment draws into sharp focus. It refers to agreement with the relevant waste disposal authorities in respect of clause 5. It is vital that we understand how dependent we are on co-operation in the change of culture, which the Minister so appositely described, to achieve the ambitious targets in the proposal. 
 As we said earlier, we are anxious for maximum co-operation, consultation and agreement with the relevant parties. In that respect, it is important to recognise that there will be real concerns about the new targets. There will certainly be worries about the financial aspects and I hope that we will have time to explore such matters more fully later in the Bill when we discuss its trading and financial implications and some of the resource issues. 
 The Bill must reassure the disposal authorities, and through them the collection authorities, and all the parties who are critical to the proper working of the arrangement, that we are interested in their views and want their agreement. We want to consult them and to work with them to achieve the targets, and the amendment goes some way to achieving what we want in the right kind of spirit. I hope that the Minister will not demur too much from what we want to achieve and that he will accept the amendment on that basis.

Norman Baker: I shall be brief. I ask the Minister to reflect on subsection (1) and to say why the Government believe that the allocating authority that has the power to make an allocation under subsection (4) should have the power at any time to alter the allocation. The proposal seems to give a draconian power to take such decisions, which will have a knock-on effect on disposal authorities and others. We want to have time to plan for and to accommodate such a measure. That is not in any way to resist the right of
 the allocating authority to alter the allocation, but merely to say that there should be some planning. The amendment provides that if such an alteration were to be made, there should be an agreement or a consultation process so that the disposal authority has the opportunity to explain the implications to the allocating authority, and to ensure that such knowledge is taken into account in taking what may be a far-reaching, forward decision.

Michael Meacher: I have much sympathy with the amendment and I will try to explain the circumstances in which we believe it is right to keep open the power to alter the allowances, although I expect them to be few. The amendment relates to the alteration of landfill allowances and would force allocating authorities to secure the agreement of the relevant waste disposal authority before making changes to any allocation that had already been made.
 We do not want to discourage local authorities from making long-term plans because they have concerns about possible changes to their allocations. That is not what we intend—quite the opposite. Clause 5(3) makes it clear that allowances cannot be withdrawn once they have been utilised. It is important that that is made explicit. 
 Although I cannot speak for the other allocating authorities, I assure the Committee that it is our intention in England to issue each waste disposal authority with its allocation of allowances for each year up to 2020 at the beginning of the scheme. Therefore all waste disposal authorities will know what their allowances are from the first year of the scheme, through to 2020—the final year, if we take advantage of the full derogation in the directive. If we do not, that is one example when we may make use of this provision. I can give an assurance that that will happen only after proper consultation. 
 The hon. Member for Lewes pressed me for other examples where this power might be used. One example where it might be necessary to alter the allowances set from the beginning of the scheme would be if the European Community made changes to the targets within the landfill directive. That is extremely unlikely; but any legislative body has the right and the power to alter its own legislation. However, in the case of the EU it is dependent upon the agreement, with qualified majority voting of the member states. I think that that is an extremely unlikely eventuality, although the possibility is not totally negligible.

John Hayes: The Minister has made a good point about the unlikely nature of those eventualities. He has also acknowledged my concern about the uncertainty of the disposal authorities, and the effect that that might have on their willingness to make the plans. If that tone could be repeated in some form of published guidance to local authorities, some of that uncertainty might be dissipated.

Michael Meacher: I am happy to accept that. It is important that we enable waste disposal authorities to understand, in preparing their long-term plans—which
 we are keen that they do—that as long as they meet the targets, and are not going to exceed the amount sent to landfill beyond their allocations, their position will be as secure as we can possibly make it. It is not set in stone, and we would have to draft the guidance carefully to suggest that it is possible to envisage circumstances in which some change might be required, but we regard those as exceptional. That should not deter authorities from the main purpose, which is to build a carefully prepared long-term plan.

Alan Whitehead: May I press my right hon. Friend, given his welcome intention to provide waste disposal authorities with their allocations at the beginning of the scheme over a long period? That is important for stability, forward planning and knowledge of what is to come. However, I have mentioned that a number of waste disposal authorities are already, at the start of the scheme, in consortiums. They already have long-term plans—in many instances they are halfway through their operation. They have perhaps made a contract for 25 years. They are effectively operating as one waste disposal authority. Is it my right hon. Friend's intention to make the allocations favourable towards those consortiums, so that they can make sense of those allocations in the light of their joint operations? They should not reach the situation, which I accept is probably hypothetical, whereby there is either insider trading as a result of the allocations, or fisticuffs between members of consortiums who were previously in harmony with one another.

Michael Meacher: My hon. Friend raises a genuine issue, and I apologise for not responding to him in the previous debate. I shall try to do so now.
 Allowances are allocated to individual waste disposal authorities. However, as my hon. Friend said, some consortiums of local authorities have agreed to work together, and have embarked on a process of mutual operation that will run for many years. That is certainly the situation in Manchester, which is part of the area that I represent. If they want to work together, there is nothing to stop them agreeing to transfer allowances between them. I prefer to use the phrase ''internal trading'' rather than ''insider trading'', which has different connotations. Internal trading between them is perfectly permitted under the Bill, as long as it is not on the basis of money. I shall return to that issue later. As long as the targets are met, the objective is to make it compatible with existing arrangements, not to stymie existing arrangements that operate perfectly well. 
 If the targets in the directive were changed, we would need the ability to alter all waste disposal authorities' targets. It would be an enormous, if not virtually impossible task, to achieve that by agreement, which is what the amendment suggests. 
 That would put the UK at risk of not meeting its obligations, and therefore of incurring European Court of Justice fines, which I am sure those who tabled the amendment want to avoid. 
 I assure the Committee that alterations to allocations in England will be made only in exceptional circumstances.

Norman Baker: Will the right hon. Gentleman give way?

Michael Meacher: I was just about to reach my peroration, but I shall give way to the hon. Gentleman.

Norman Baker: That is why I intervened when I did: I wanted to make another point before the Minister finished his peroration.
 The clause talks about an authority making an allocation, which necessarily relates to one part of the United Kingdom rather than all of it. The Secretary of State is not involved in this particular case. The Minister explained that a change might be necessary because of changes in EU legislation, yet there seems to be no provision to ensure that if one authority changes its allocation, the other authorities have to follow suit. Does the Minister envisage a situation in which there may be a change in England, but not in Scotland, Wales or Northern Ireland?

Michael Meacher: It is possible to envisage such a circumstance, although what would cause such an unlikely change in England is likely also to apply to Scotland and Wales. However, I would not like to say point blank that there could be no such circumstances. I repeat that we are talking about circumstances that are very unlikely to arise. Governments often have to keep options open that they do not expect to use. I sometimes cannot see more than a week ahead, if that. Goodness only knows where we shall be in 20 years' time. We should have the flexibility, while giving every assurance to local authorities that we have no intention of messing around with their long-term plans or of intervening in any other way. I say that to the hon. Member for South Holland and The Deepings, who made a very fair point. The power is a power of last resort in case circumstances arise over which we have no control. We should make that clear.

Jonathan Sayeed: I am glad to hear the Minister give my hon. Friend the Member for South Holland and The Deepings that assurance, because as the principal duty for implementing the landfill directive is imposed on the UK Government, as the fines will be for not implementing it, it does not make much sense to give waste disposal authorities a power of veto over what the UK Government can or cannot do. I have one question for the Minister: what is the position of a waste disposal authority that crosses a transnational boundary, for instance, between Scotland and England, and England and Wales? In the case of the England and Wales borders, although I am not sure about the Scottish borders, I thought that there were at least one or two cases where a disposal authority went over a transnational border. If that is the case, it could lead to conflict on such an occasion.

Michael Meacher: I am very glad that I have just been advised that there is no option for straddling because I agree that, if it were allowed, it might cause one or other devolved Administration, or England, to miss out in exceptional circumstances. Therefore it is not permitted. On that basis—reaching for my peroration for a third time, so it will fall very flat—I hope that the hon. Member for South Holland and The Deepings
 will feel satisfied that he has secured the purpose of his amendment and will not press it to a vote.

John Hayes: The Minister has given an assurance that he has taken on board the argument, which found support around the Committee, that the guidance issued to local authorities should provide the assurance that we request. He has also taken on board the argument that the guidance should repeat the notion that the provisions relate to exceptional circumstances—I accept his argument that the wording would have to be carefully considered—as it were, a long-stop provision in the Bill, given circumstances that cannot reasonably be foreseen at the moment. Given those assurances, I am happy to withdraw my amendment so that the Minister will not be forced to extend his oratorical powers any further and think of yet a fourth peroration.
 Amendment, by leave, withdrawn. 
 Clause 5 agreed to.

Clause 6 - Borrowing and banking of landfill allowances

Sue Doughty: I beg to move amendment No. 1, in
clause 6, page 4, line 17, leave out 'by regulations', and insert 'not'.

Anne Begg: With this it will be convenient to discuss amendment No. 2, in
clause 6, page 4, leave out from line 20 to line 11 on page 5.

Sue Doughty: This seems to me to be one of the key areas of the Bill, which, as we discussed on Second Reading, is designed to do several things. It is possible to meet targets or to trade them, but within that, there is flexibility to allow local authorities to catch up, albeit by spending money. The ability to trade within the year gives them flexibility. However, the clause will allow them to carry over allowances to the next year by banking them, and that concerns me. It seems to be a risky strategy, if we are trying to reduce, year on year, the amount of waste that we send to landfill, because it would seem possible to keep sending waste to landfill and then suddenly reduce the amount sent to landfill some time afterwards. It would seem a bit reckless to defer all the good work that I was doing in any area, because I had borrowed my allowances for subsequent years, and then suddenly had to catch up at the last minute because I had no allowances left.
 We need to forward plan. The Minister helpfully said that disposal authorities will know what the targets are for the 20 years of the scheme. That would seem to provide a good opportunity for business planning. I accept that we are talking about a small part of the whole waste management strategy, which we discussed extensively this morning, but those who are trying to develop their waste management strategies—the disposal authorities and the waste management business, which is contracted to execute waste management strategy on behalf of the authorities—need to get on with their planning. It would appear that if one is allowed to borrow allowances for a subsequent year, one might delay investment in the necessary technologies. I should have thought that the Government might be trying, in the Bill, to send the message, ''We must stop sending waste 
 to landfill. We know what our targets are, so, using those allowances, we must plan wisely for the future.'' Even with the statutory recycling targets, if municipal waste grows by 3 per cent. a year, one could find that, by borrowing allocations from subsequent years, one was sending the same amount of waste to landfill in 2008 as in 2003. To me, that is contrary to the sense of the Bill. We want to reduce landfill as soon as possible by trading within those years. Trading within the year would allow that to happen, but borrowing from subsequent years would and could defer it if we did not have a prudent disposal authority, which would stack up trouble for authorities in future years. That is why we have proposed changes: we do not want that to happen.

Jonathan Sayeed: The concepts in the amendments are ones that I brought up on Second Reading, and I know that they were mentioned by the hon. Member for Lewes in his speech. The amendments would remove the power to borrow and bank allowances.
 As the Bill stands, a waste disposal authority could borrow additional capacity to landfill from the landfill allowances of subsequent years, except target years. That may mean that decisions and investment in technologies necessary to enable the UK to comply with the landfill directive are deferred. Even with statutory recycling targets, if municipal waste continues to grow at 3 per cent. per annum, a waste disposal authority could, by borrowing allowances from subsequent years, feasibly landfill in 2008 quantities of biodegradable municipal waste similar to those that it landfilled in 2003. 
 Perversely, borrowing could significantly reduce the incentive for local authorities to trade. I therefore ask the Minister to respond the argument that the banking of permits may act as a disincentive for waste disposal authorities to improve continuously, year on year, and to invest in the required new and long-term infrastructure. We do not want to build into the Bill a culture of disincentives and short-termism.

Michael Meacher: I entirely agree with both hon. Members who have spoken; it is certainly important that we do not allow the flexibility written into the Bill to be abused. I hope that I shall be able to persuade them and the rest of the Committee that that will not be the case. There are several safeguards that I believe will adequately prevent abuse. The Bill enables us to provide a measure of flexibility that we think desirable, so long as it cannot be abused.
 The amendments relate to the banking and borrowing of allowances and would prevent allocating authorities from permitting allowances to be used in scheme years other than the one for which they were allocated. On Second Reading, I emphasised that the Bill was the first of its kind in Europe, possibly in the world. I also admitted that that was probably for the wrong reasons, and not because of our great innovation. What is unique about the Bill is that it sets up the framework not only for the system of landfill allowances—which is very important—but for the 
 method of trading those allowance between waste disposal authorities. 
 The trading system as a whole is designed to ensure that waste disposal authorities can reduce the amount of biodegradable municipal waste going to landfill in a manner suitable to them, while ensuring that the UK still fulfils its obligation for target years. The system, if one looks at it holistically, will give waste disposal authorities flexibility and ensure cost-effectiveness throughout the UK. It is quite ambitious; it is certainly innovative; and I believe that it can work. 
 We refer to the inter-year use of allowances—between years as opposed to within a year, to which the amendment refers—as either banking or borrowing. Banking allows waste disposal authorities to keep allowances that have not been used in one year for use in later years. That rewards good performance in waste management. Where a waste disposal authority has put in place good basic systems, it might already be diverting a high proportion of waste from landfill. With a banking system, it can save allowances in early years and either trade them or use them in later years when targets get tighter and it is waiting for new initiatives to come on stream. 
 Borrowing, which might be more of a problem for some hon. Members, means that waste disposal authorities will be able to bring forward the use of allowances that have been allocated for future years. I understand the arguments and the risks. Borrowing will be possible in England because the aim is, as I have said, for allowances to be distributed for all scheme years at the beginning of the scheme. The objective of that flexibility is to encourage responsible waste management planning by giving waste disposal authorities time to invest in new facilities. We are in the early stages of what will be a steep incline as we increase the system's capacity to facilitate recycling. That will happen only if there are significant increases in investment in plant and infrastructure, which is what the national recycling waste management fund is all about.

John Hayes: The problem is that the borrowing system that the Minister envisages needs to be seen in relation to the accelerating targets. If authorities borrow early and their targets get stiffer and stiffer, as they surely will, they might find themselves in considerable difficulty in the medium and long term. If there were a flat-line target, and they were expected to perform in a roughly equivalent way year on year, it would not be so much of a problem. My anxiety is caused by the combination of tough, accelerating targets and the potential for early borrowing against allowances.

Michael Meacher: I hope that the problem will be avoided by the publication of allowances for each of the next 20 years. The allocating authorities have informed the waste disposal authorities what those figures will be each year. Clearly, they have to be planned for, but there is no reason why we should have to tighten them. If we do a lot better in the early years, it is possible that they could be loosened a little towards the end. There is no question of tightening them so long as we know where we have to get to in each of the target years, particularly 2016 and 2020.
 Although I do not have the figure to hand, I know that the target will be no more than 35 per cent. of 1995 levels. Once we have allocated the responsibility for meeting that to each waste disposal authority, there will be no reason for altering the framework.

Norman Baker: I am sorry to be unduly pessimistic, but we are giving waste disposal authorities and waste collection authorities a huge responsibility—the Minister recognises that these are stiff targets—when they have previously had no targets for avoiding landfill and increasing recycling. Suddenly, a regime is being imposed on them, and their response will be to borrow allocations until they sort out what they are doing. They will be faced with difficult decisions about incinerators and so on, and they will borrow and borrow on the never-never. When we come to 2007, many authorities will run out of borrowing time and will not meet their targets. I am sorry if that sounds pessimistic, but I fear that it will happen. What will the Government do in 2007 if that is the case?

Michael Meacher: They will take account of the factors of which I am about to tell the Committee. Fortunately, that intervention came just before the point in my speech at which I am to set out the safeguards that will prevent us from getting into that position. The regulations that permit borrowing may place limits on the use that waste disposal authorities can make of borrowing from future years—we have the capacity to regulate that. Let me make it clear that banking and borrowing will not be a way for waste disposal authorities to evade their responsibilities.
 The Bill puts in place a number of measures to ensure that the system cannot be abused. Most importantly, banking and borrowing across or into target years is will not be permitted. That removes the potential danger of a waste disposal authority using up all its allowances in the first three years of the scheme, and possibly causing the UK to fail to meet interim targets. Such an authority would certainly be liable for penalties in future years. 
 There are other safeguards. For example, regulations may provide for limits on the number of allowances that may be used inter-year, or specify conditions that have to be met. Ultimately—as some politicians like to say, this is the killer point—each waste disposal authority will know that if it landfills more than its allowance because it has borrowed and utilised it in previous years, it will be liable to a financial penalty and to a supplementary penalty where that failure contributes to the UK as a whole missing its landfill directive targets. That collection of safeguards is more than adequate to prevent abuse of the flexibility. 
 The amendments would scrap the part of the trading scheme that allows inter-year use of allowances. That would be a wasted opportunity as regards the UK showing that it pursues policies at the forefront of sustainable waste management which combine the maximum flexibility with ensuring that the landfill directive targets are achieved. Moreover, meeting the targets would be a much more painful process if there were no 
 flexibility to allow investment to be made; that takes some years to come on stream. The situation would be much more difficult for individual waste disposal authorities and, indeed, the UK as a whole. Again, we have tried to get right the balance between providing as much flexibility as we can, and ensuring that that cannot be abused and that the country as a whole can meet its targets.

John Hayes: I want to make a short contribution, because the Minister has put his finger on the two sides of the debate. There is a concern, which I have expressed, that not all authorities will act responsibly. My hon. Friend the Member for Mid-Bedfordshire spoke about the risk of short-termism if authorities do not see their way to employing the strategic planning for which we all hope. That is complicated by the fact that some local authorities have a more strategic view of life than others. We know that from our experience of local government and our study of how local authorities currently deal with waste.
 The Minister is right to say that the safeguards will limit that problem and, furthermore, to make the key point that people start from a different baseline. There is an enormous variety not only in the profile of disposal and collection authorities, but in their performance, and that is why we need the flexibility to which the Minister referred. It will allow some to borrow and some to bank. Some will be ahead of the game; some will be well behind it, and they will need to invest heavily early on to meet the medium and long-term targets. The Minister set out a balanced case for the pros and cons of the system. There are risks and pitfalls, but on balance the necessary flexibility may be more significant than the risk.

Michael Meacher: This is truly a remarkable Committee. I am pleased to hear the leading Opposition spokesman defending my case with greater eloquence, persistence and comprehensiveness than I could have done. He is absolutely right, and as they say, I rest my case.

Sue Doughty: This short debate has been interesting, but I do not think that we are entirely convinced. As I think the Minister accepted, we have a real worry about local government borrowing against the future without the certainty that what they hope will happen will come about, especially given the possibility of a change of Administration or strategic direction. People may borrow at one stage, saying, ''We know where we are,'' but there may be a couple of elections further down the line and everything may change completely, so we are hostages to fortune.
 The Minister described the penalties and great threats that may be imposed. I hope that he would make it clear to local authorities that those threats were serious and not negotiable; that might offset some of our fears. We shall put our trust in the Minister to ensure that those penalties are well known and understood, and to make it clear what will happen to local government if the rules are 
 transgressed. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 6 ordered to stand part of the Bill. 
 Further consideration adjourned.—[Mr. Ainger.] 
 Adjourned accordingly at fourteen minutes to Five o'clock till Tuesday 8 April at five minutes to Nine o'clock.